Financial information required in Web Summit shareholder's action, court told
High Court reporters
A Web Summit shareholder bringing one of several actions involving the technology events company is seeking financial information and other documents he believes will support his case.
The High Court is hearing a discovery motion brought by David Kelly and his corporate entity Graiguearidda Ltd, which holds his 12 per cent share in Web Summit.
The court heard various documents were required by Graiguearidda for its claim that Web Summit funds may have been used in a defamation payout over a tweet by the company’s chief executive, Patrick Cosgrave, as well as to promote some of Mr Cosgrave’s personal and frequently political tweets.
Graiguearidda is also looking for specific financial records going back a number of years to conduct a valuation of the company and of Mr Kelly’s shares.
Among Mr Kelly’s contested claims is an allegation he was made an offer on behalf of Mr Cosgrave for his shareholding to be purchased for €1.25 million. Mr Kelly claims this is a “gross undervaluation” of his shares, his counsel, Frank Kennedy, said on Tuesday.
The claims are denied, and the court heard the respondent parties believe much of the requested documents are superfluous, overly historical and/or unconnected to the matters pleaded by him.
Profit share agreement
Graiguearidda Ltd is suing Mr Cosgrave, his entity, Proto Roto Ltd, and Web Summit’s holding company Manders Terrace Ltd. Graiguearidda claims oppression of shareholders’ rights under section 212 of the Companies Act, 2014.
Mr Kelly has also issued separate personal proceedings against Mr Cosgrave and Manders Terrace alleging a breach of a profit share agreement.
Daire Hickey, whose Lazvisax Ltd retains his 7 per cent share in the tech conference firm, also has independent personal proceedings alleging a breach of the same agreement.
Through Lazvisax he has also brought a section 212 case against Mr Cosgrave, Proto Roto and Manders Terrace claiming he was oppressed as a shareholder.
Manders Terrace has a separate action before the courts in Ireland and the United States, alleging Mr Kelly breached his duty to the company.
The claims in all the cases are denied.
On Tuesday, the court heard that several discovery motions, brought variously by the parties involved in some of the actions, had been resolved without the need of the court’s assistance.
However, Mr Kennedy said there remains a “clear conflict” between the independent experts involved in the action taken by his clients Mr Kelly and Graigueridda over the level of documentation that should be disclosed.
Mr Kelly, counsel said, has gone to significant effort to acquire analysis from a financial adviser at Grant Thornton in support of his discovery application. It is not for the respondents, or the respondent’s independent expert, to limit the valuation material that Mr Kelly’s expert has deemed relevant and necessary to Graigueridda’s claim.
The information sought is “extremely focused”, Mr Kennedy went on, and if it transpires that some of the materials do not exist the respondent can simply say so in a sworn statement.
The court heard the respondents contend that certain historical financial information sought is not required for the purposes of assessing the company’s current value.
